Deviations from the perfectly competitive market can lead to
A. inefficiently high production costs.
B. higher prices and smaller outputs.
C. less efficient resource allocation.
D. All of the responses are correct.
Answer: D
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If the nominal interest rate falls, everything else remaining unchanged, ________
A) the real interest rate will rise B) the inflation rate will decrease C) the real interest rate will remain unchanged D) the real interest rate will fall
In the Mundell-Fleming model, all of the following are true EXCEPT:
a. the intersection of the IS and LM curves determine the equilibrium exchange rate. b. the BP curves position is determined by the exchange rate. c. the policy choice between fixed and floating exchange rates shifts the BP curve. d. the extent of capital mobility determines the slope of the BP curve. e. all of the above are true.